2007 Eminent Domain Report Card: Nebraska Gets A “D+”

Arlington, Va.—Nebraska home and small business owners have reason to be concerned according to a 50-state eminent domain report card released today. In the two years since the infamous Kelo eminent domain ruling from the U.S. Supreme Court that allowed eminent domain for private gain, Nebraska has done little to protect property owners across the state.

“Nebraska homeowners are not much more protected from eminent domain abuse today than they were the day the Kelo decision was announced,” said Steven Anderson, director of the Castle Coalition, a national grassroots organization that examined eminent domain laws for each of the 50 states since the Kelo ruling. Read the report at: www.CastleCoalition.org/publications/report_card.

According to the report, “In 2006, the Nebraska Unicameral Legislature took only a baby step toward providing its citizens with much-needed protection for their property rights.” Legislative Bill 924 prohibits the use of eminent domain “if the taking is primarily for an economic development purpose.” However, there is nothing stopping the condemnor from declaring one primary purpose for the taking and then changing the purpose after condemnation. The prohibitions do not apply, however, to “public projects or private projects that make all or a major portion of the property available for use by the general public ….” The bill clarifies that agricultural property cannot be designated as “blighted” by local governments and therefore cannot be subject to condemnation.

The effect of some aspects of this bill, such as the ability to use eminent domain for “private projects that make all or a major portion of the property available for use by the general public,” is uncertain. Although the Unicam may have merely intended for this provision to allow condemnations for private museums or recreational centers—neither of which are traditional public uses—it also could be (and almost undoubtedly will be) argued that this exception will allow shopping malls or similar commercial ventures that allow a high degree of public access. If a court finds that this was the legislative intent, the language restricting condemnations for economic development becomes worthless. The Unicam would have been better served to limit the use of eminent domain strictly to traditional public uses.

Another deficiency of Nebraska’s new law is that it retains a huge exception for the condemnation of properties designated as “blighted” under the state’s urban renewal laws, which may then be transferred to private developers. As is the case with many other states, Nebraska’s definition of “blight” is incredibly broad, allowing local governments the opportunity to affix the label to almost any neighborhood that a private developer might desire, regardless of the condition of the targeted buildings. Unless the Unicam acts to clarify that blight designations should only be meted out on a parcel-by-parcel basis where the properties are identified as posing a threat to the health or safety of the community, these loopholes will continue to allow local governments to condemn homes, businesses, and places of worship for private profit.

The report concluded, “In the future, Nebraska’s lawmakers should extend the same protection they gave to farmers to every property owner across the state. All Nebraskans—regardless of where they live or what they do—deserve protection from the abuse of eminent domain.”

Among the states that passed the strongest reforms protecting property owners are Florida, Michigan, Nevada, New Mexico, North Dakota and South Dakota, each of which received an A or A- grade. States that received F’s were: Arkansas, Connecticut, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, Oklahoma and Rhode Island.

“In only two years since Kelo, 41 states have reformed their laws to offer greater protection to small property owners,” said Jenifer Zeigler, legislative affairs attorney with the Castle Coalition. “But much more work remains if homeowners, small business owners, farmers and churches in Nebraska and beyond are to be safe from the unholy alliance of tax-hungry governments and land-hungry developers.”

The report seeks to step back and evaluate the legislative work that has been done and is left to do. It finds, “Some states have passed model reforms that can serve as an example for others. Some states enacted nominal reform—possibly because of haste, oversight or compromise—and need to know what is left to fix. And finally, there are those states that have failed to act altogether, leaving home, farm, and business owners threatened by Kelo-type takings and beyond.”

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[NOTE: To arrange interviews on this subject, journalists may call John Kramer, the Institute for Justice’s vice president for communications, at (703) 682-9320 ext. 205 or in the evening/weekend at (703) 527-8730. For more information on eminent domain abuse, visit www.ij.org or www.castlecoalition.org.]